Talks with Weems consultant continue

The county has taken baby steps towards negotiating a contract with Community Hospital Consulting (CHC) to oversee operations at Weems Memorial Hospital but the path ahead looks long.

On Tuesday afternoon, county commissioners and county staff met with representatives of CHC, a Plano-Texas-based not-for-profit that provides support for not-for-profit and government hospitals, to discuss changes to a proposed contract.

Under discussion was a 24-month agreement. Jim Coleman. senior vice president of southeast hospital operations for CHC said the short-term arrangement would give CHC the opportunity to assess operations at Weems and determine the maximum earning potential of the hospital.

The county paid CHC $20,000 earlier this year to assess hospital operations and Coleman said his firm would use the results of that study to create a plan of action for Weems if hired to manage the hospital.

County Attorney Michael Shuler said he understood that the many changes to the document were an attempt by CHC to bring the contract in line with their standard agreements with other hospitals they manage, and that he wanted to discuss some of the changes.

At the outset, Shuler said his expectation for the meeting was to find out if CHC and the county had a meeting of the minds for contractual agreement. He said he wanted “to work through issues” with all of the county commissioners present.

No public comment was allowed during the meeting although the public was invited to comment before negotiations began.

Allen Feifer of the Concerned Citizens of Franklin County, the sole speaker from the public, protested the restriction, but Shuler told the assembly that the purpose of limiting public comment was to allow for a speedier meeting and that the public would have ample opportunity to comment during future meetings.

Shuler then posed about 20 questions to Coleman and David Butler, senior vice president and general counsel for CHC.

CHC had struck through many clauses of the proposed contract presented by Shuler to commissioners. The main changes to the document dealt with fees and liability.

Shuler said his original proposal to CHC was $25,000 monthly for management services, but CHC had increased the fee to $30,000, and requested $5,000 monthly for expenses with an annual cap of $60,000. These fees do not include the salary of the hospital CEO, who would be the only employee of CHC on site, or the services of consultants who would perform work not included in the contractual obligations of CHC.

No figure was available for the additional consultation fees. Butler said CHC would seek county approval before hiring additional consultants or specialists.

When commissioners asked for a document outlining what services CHC considered part of their contractual obligation and what would be excluded, Butler replied that it would be possible to provide a list of what his company considered to be their contractual responsibility.

Coleman said the county would not be charged an hourly fee for his services but would be responsible for his travel expenses if he traveled here from CHC’s headquarters in Texas.

Shuler asked for a clause specifying that the salary for the CEO not be in excess of industry norms. Butler replied that CHC pays according to CHC standards.

“We can’t have different benefit packages for different employees (for legal reasons),” Butler said. “Our initial target for compensation is right in the middle. Everyone at CHC has that same compensation model.”

Chair Smokey Parrish said he approved of the salary proposal and thought it was important to build in possible rewards for good job performance. Butler said CHC compensates employees for excellent work.

The discussion then turned to CHC’s liability for legal issues and malpractice cases at Weems.

Shuler said CHC should accept liability for harm caused to the hospital through the direct actions of their own employees.

“They want to limit their liability to the terms contained in the agreement,” said the county attorney. “There’s a lot of general statements about services but not a lot of detail. This may be industry standard. I’ve only dealt with one hospital but the agreement seems very one-sided. In terms of failing to perform under contract I would hate to go into a court of law and try to enforce this contract.”

Shuler said he would “hope for the best but plan for the worst” in negotiations over the management agreement.”

Butler said CHC could offer no guarantees of success and his firm could not accept liability. “We try different things and some of them may not work,” he said.

He said that because the CEO would be CHC’s only employee at Weems, his firm could not accept responsibility for mistakes in the day-to-day functions of the hospital. He also said CHC could not accept responsibility for Weems' continuing eligibility to participate in Medicare or Medicaid programs.

“I’m approaching from a different perspective. We will use our reasonable best efforts to administer the hospital,” Butler said. “I don’t want to be held to a negligence standard. If we provide our reasonable best efforts to do it right, we have performed to our contract. There are a lot of things that need to be fixed and worked on. That’s why we offered a 24-month contract.”

Under the proposed agreement Weems would be responsible for continuing to supply liability and malpractice insurance for the hospital. The hospital board would continue to play an active and important role in day to day operations at Weems.

Coleman said his firm would consider taking on operation of ambulance services although this is not a function they perform for their other consultation clients.

Commissioners urged Shuler and the CHC representatives to continue negotiations and expressed confidence in reaching an agreement with CHC. Butler and Shuler both indicated they were optimistic about negotiations.

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